0:00
well here's another gem that labor left
0:01
out of their Manifesto the state is too
0:03
big and needs to be cut down to size
0:06
well we've been writing that headline at
0:07
CM for 20 years so is K starma finally
0:10
on board welcome to the week in business
0:19
may now on Monday I asked in city am who
0:23
if anyone will have the courage to take
0:24
a chainsaw to the British State it's an
0:27
inelegant metaphor but an effective one
0:29
as Argentina Javier melee and Elon Musk
0:32
in the US Revel in the process of
0:34
hacking away their state infrastructure
0:36
melee won his election after waving an
0:38
actual chainsaw around on stage as a
0:41
theatrical warm-up act ahead of his
0:42
radical and effective reform agenda now
0:45
K starma is setting out his plans to
0:47
reform the state with AIDS apparently
0:49
referring to this agenda as project
0:52
chainsaw well this is gratifying but the
0:54
question is whether the kit will be
0:56
black and& Deca or Fisher Price starma
0:58
has talked a good talk on slashing
1:00
regulation and there's no doubt that
1:01
he's nudged some industry Watchdogs into
1:04
more of a progrowth mindset but he
1:06
insists he wants to go further and he's
1:08
interested in nothing less than a total
1:10
overhaul of the state's functions
1:12
capabilities and apparently its size
1:15
writing in the Daily Telegraph the PM
1:16
bemon the fact that the civil service
1:18
has grown by 130,000 in just under a
1:21
decade but he's right of course Public
1:23
Services have not improved he says so
1:26
what's he going to do about it well
1:27
we're told that thousands of whiteall
1:29
jobs will go quangos will be scrapped or
1:31
merged and government departments will
1:33
take on many of the roles currently The
1:35
Preserve of those arms length bodies
1:37
this is good sensible stuff and it's
1:39
certainly the case that the Tories took
1:41
their eyes off the ball during the last
1:42
few years of their period in office when
1:45
I put it to Shadow business secretary
1:47
Andrew Griffith that his party didn't
1:49
exactly bequeath an agile efficient
1:52
public sector uh he conceded that the
1:54
malaise has gone on for decades and that
1:56
he's 100% supportive of any effort to
1:59
slim down the regulatory infrastructure
2:01
his leader kmy Bok has said that she
2:03
wants to take her time in working out a
2:05
complete rewiring of the state ahead of
2:07
the next election so is K starma now
2:09
stealing a march on her well not exactly
2:12
starma says I'm not interested in
2:15
ideological arguments about whether the
2:16
state should be bigger or smaller I
2:18
simply want it to work well I am
2:20
interested in the ideological arguments
2:22
and I think the state should be smaller
2:24
and I think it has to be smaller in 2010
2:26
government spending as a proportion of
2:28
our GDP was 46% having climbed steadily
2:31
from a low of about 35% in 1997 What
2:34
became known as austerity under David
2:36
Cameron saw a gradual decline of State
2:39
expenditure falling from 46% down to
2:42
about 39% of our GDP by the end of 2020
2:46
then covid hits and the government
2:47
spends hundreds of billions of pounds in
2:49
its response taking State expenditure to
2:52
a peak of 53% of our entire National
2:54
output when the pandemic receded public
2:57
spending fell of course but not back to
3:00
its pre-pandemic level not even close by
3:02
2023 it had settled back to around 45%
3:06
now hemmed in by economic reality
3:08
ministers are going to have to wield the
3:09
axe or the chainsaw at the spring
3:11
statement in a couple of weeks they have
3:13
no choice I've heard of some unprotected
3:15
government departments bracing for 10 or
3:16
11% cuts to their budget now that is
3:19
austerity by any measure but ministers
3:21
are allergic to that word so it stands
3:23
to reason that the Prime Minister
3:25
mindful of the need to take his chainsaw
3:27
of public spending will frame it as
3:29
reform Tories slash the state but labor
3:31
will fix the state Tories want a small
3:33
state but labor want a smart state do
3:35
you get it starmer actually says he
3:37
wants an active State revealing that he
3:39
is in fact perfectly ideological and
3:41
he's entitled to be I don't know why he
3:43
shies away from it now do you believe
3:44
for a second that he entered politics
3:46
motivated by a desire to slash red tape
3:49
deregulate and shrink the public sector
3:51
did Rachel Reeves did Johnny Reynolds
3:53
did any of them of course not I don't
3:55
actually doubt their reforming Zeal
3:57
they've come into office and discovered
3:58
a bloated inefficient system and of
4:00
course they're absolutely right about
4:01
the moral and financial arguments in
4:03
favor of dramatic welfare reform
4:06
something that sets starmer up for a
4:08
mighty battle with his backbenches but
4:10
this debate matters enormously it's
4:12
bigger than a single government or a
4:14
single Chancellor or how much fiscal
4:16
Headroom exists in March because it goes
4:19
right to the heart of the biggest
4:20
questions we Face answers to which will
4:22
Define our future determining our
4:24
individual and Collective Prosperity I
4:27
wish starma well with his reform agenda
4:30
yes deploy AI in public services yes get
4:32
rid of underperforming civil servants
4:34
and yes scrap some quangos and agencies
4:37
and keep regulations under constant
4:39
review but we can judge this government
4:40
by their choices so far and they have
4:43
revealed their priorities taxes up
4:45
public sector pay Rises handed out more
4:47
than 20 new quangos and Regulators
4:49
already announced with businesses called
4:51
on to fund all of this all in all it's
4:53
just very hard for me to picture starma
4:55
wielding a chainsaw if anything he's
4:57
more of a scalpel man now my op istic
5:00
end note this week is this the search
5:02
for economic growth is no longer The
5:04
Preserve of OB briefing documents and
5:06
cam opinion colums because a new outfit
5:09
called looking for growth has emerged
5:11
powered by what you might call Ordinary
5:13
People dissatisfied with our economic
5:15
lot impatient for Change and thirsty for
5:18
a bit of ambition they meet in pubs and
5:20
debate what can be done from London to
5:22
exitor Birmingham and Bristol new
5:24
chapters of this Grassroots movement are
5:26
springing up my friend Seb Payne wrote
5:29
an excellent feature on them in the
5:30
times last week you should go and find
5:34
forrow to find out who they are and what
5:36
they're all about they're not interested
5:38
in Party politics they're interested in
5:40
Solutions and I say all power to them
5:42
that's it for this week stay up to date
5:44
and in the know with the City app and
